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Who is considered a Tax Resident in Pakistan?

An individual is considered a resident for a tax year in Pakistan if they meet either of these conditions:

1. The 183 Days Rule: The individual is physically present in Pakistan for a total of 183 days or more within the tax year. This can be continuous or spread out over multiple visits.

2. The 120 Days + 365 Days Rule: The individual is present in Pakistan for 120 days or more in the tax year and has also been in Pakistan for a total of 365 days or more during the four years immediately preceding the current tax year.

So, even if they are not in Pakistan for 183 days in the current tax year, they can still be considered a resident if their presence in the past years combined with the current year meets the given criteria.

Disclaimer: This post is for educational purposes only. Income tax laws and regulations are subject to change. Always seek latest updates before making any decisions.

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**Deemed income** in Pakistan, **Section 7E** of the Income Tax Ordinance, 2001, introduced the concept of deemed income for immovable property. According to this section, a resident person is treated as having derived income equal to **5% of the fair market value** of their immovable property in Pakistan. This deemed income is then taxed at a rate of **20%**.

**Deemed income** refers to income that is attributed to an individual or entity, whether or not it is actually received by them. Essentially, it's an assumed or estimated income that tax authorities believe the individual or entity should have earned, based on certain criteria or circumstances.

Reminder: Dear taxpayers, please file your tax returns in time to fulfil your duty as responsible citizens of our beloved country. The non-filers may face disconnection of mobile phone sim and utility services

Which non-residents need to file an income tax return?
3. Property Ownership:
Non-resident individuals owning property in Pakistan or generating rental income from properties located in Pakistan may also be required to file returns, depending on the income earned.

Which non-residents need to file an income tax return?
2. Withholding Tax:
Non-residents who have had tax withheld on income generated in Pakistan (e.g., from dividends, interest, or services) may need to file a return to claim any tax credits or refunds."

Which non-residents need to file an income tax return?
1. Income Derived from Pakistan:
A non-resident individual who has Pakistan-source income is required to file an income tax return. This includes income from salaries, business, property, capital gains, or other sources arising in Pakistan.